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The premise that enrolling an employee in the plan doesn't cost the employer anything isn't true. The average cost of enrolling a participant is $25-75 (for materials, education, etc.) and then there may be costs of administering the plan based on the number of participants. Comparing this to a single person 401(k) is meaningless - a single person 401(k) does not have to follow the rules of a true employer with employees sponsored 401(k). There are nondiscrimination tests that must be performed. There may have to be an audit of the financials. There are trustee fees for the trust, and possibly custody fees (which are inapplicable to a single person plan). There are those educational materials and personell. There are recordkeeping systems that need to be maintained (and it is unlike just opening an individual account with a mutual fund) that are mandated by the IRS and DOL under the provisions of ERISA. Most people don't understand the complexities of operating a plan, simply because it is a tax-advantage plan that is HIGHLY regulated by ERISA and the tax code. Trust me on this one. I'm Director of ERISA Services for a large provider of bundled 401(k) plans.

O.K. Sorry to get on my soapbox, but.... to do it right is expensive. Don't like that? Talk to Congress....
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